Analysts updated the price target for United Parcel Service, Inc (NYSE:UPS) after Q4 results.
- Wells Fargo analyst Allison Poliniak-Cusic raised the price target to $270 from $245 and maintained an Overweight rating on the shares.
- The analyst notes Q4 results well-outperformed expectations reflective of UPS' evolved strategy of "Becoming better, not bigger."
- Related: UPS Stock Surges Post Q4 Earnings Beat, Solid FY22 Outlook
- In her view, UPS is in the early stages of driving accelerated earnings performance through its revenue quality initiatives and efforts to decrease its cost to serve with ample runway for improvement over the next three years.
- Poliniak-Cusic believes that UPS will continue to generate strong free cash flow to reinvest back into its business coupled with the deployment of capital through dividends and, to a lesser extent, share repurchases.
- Raymond James analyst Patrick Tyler Brown increased the price target to $275 from $260 and maintained a Strong Buy rating on the shares.
- Brown sees industry tailwinds anchored by a shift toward e-commerce and a solid pricing landscape. The analyst views that the elixir of new management and new volume paradigm as a result of COVID should fuel an improved margin and free cash flow profile for UPS.
- KeyBanc analyst Todd Fowler raised the price target to $265 (an upside of 15%) from $250 and kept an Overweight rating on the shares.
- The analyst believes UPS remains in the early innings of an operational turnaround focused on improved margins and returns, complemented by accelerating capital deployment, all of which is evident in near-term results and outlook commentary.
- Fowler raised the 2022 estimate to $12.75 from $12.25, reflecting stronger U.S. Domestic margins and International revenue, both of which may prove conservative given current fundamentals.
- The analyst also increased his 2023 estimate to $13.75 from $13.00.
- Price Action: UPS shares traded lower by 0.32% at $229.95 on the last check Wednesday.
